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FAO Strengthens Commitment to Iraq in Addressing Environmental and Agricultural Challenges

Following the meeting of the Director-General of the Food and Agriculture Organization of the United Nations (FAO), Dr. Shu Donio, with His Excellency the President of the Republic of Iraq, Abdul Latif Rashid, during the United Nations Water Conference 2023, in which Iraq reaffirmed its commitment to finding sustainable solutions to the agricultural and climate challenges facing the country, a specialized team from the organization's headquarters successfully completed a mission to the Republic of Iraq from October 10th to 12th.

Led by Mr. Li Leifeng, Director of the Land and Water Department (NS), accompanied by Ms. Fidaa Haddad, responsible for forests in the Forestry Department, Mr. Jacobo Monzini from the Natural Resources Management Office in the Investment Center, and Mr. Faras Ziyadat from the Land and Water Department, this working group conducted a thorough assessment of the various environmental and agricultural challenges faced by Iraq and potential solutions, including water harvesting and storage, modern irrigation methods, combating sand and dust storms, afforestation, wastewater treatment and reuse, and drought-resistant crops.

The delegation, accompanied by the representative of the Food and Agriculture Organization in Iraq, Dr. Salah Al-Hajj Hassan and his team, held important meetings with high-level Iraqi officials, including a meeting with His Excellency the President of Iraq, productive discussions with members of the Cabinet Advisors, and Minister of Water Resources, Mr. Awn Dhiab Abdullah. This also included meetings with the technical deputies of the Ministries of Environment and Agriculture, Dr. Jasim Abdul Aziz Hamadi and Dr. Meethaq Al-Khafaji, in addition to the Deputy Minister of Foreign Affairs for Bilateral Relations, Ambassador Mohammed Baher Al-Ulum.

In addition to these significant meetings, the delegation met closely with the United Nations Qatar Priority Working Group responsible for enhancing natural resource management, disaster risk management, and climate resilience (PWG4). This meeting, which was also attended by a member of the Special Representative of the United Nations Secretary-General's Office, provided a comprehensive overview of climate-related challenges in Iraq and showcased the collaborative efforts of various United Nations agencies in addressing these challenges.

The team also had the opportunity to closely acquaint themselves with the programs of the Food and Agriculture Organization in Iraq and its close cooperation with key Iraqi ministries, reaffirming the organization's commitment to supporting sustainable development efforts in Iraq and enhancing influential partnerships. Additionally, they attended a meeting with the working group.

Iraqi officials expressed deep appreciation for the organization's work and cooperation, acknowledging the pivotal role it plays in addressing agricultural and climate challenges, and emphasized the necessity of further enhancing the ongoing partnership between Iraq and FAO.

By John Lee.

Prime Minister Mohammed Shiaa Al-Sudani chaired a meeting on Sunday evening to discuss diversifying gas sources for power stations in Iraq.

During the meeting, the delegation's report on their recent visit to Qatar was discussed, led by the Deputy Minister of Electricity.

The meeting concluded with an agreement to establish a fixed system for processing imported gas at Faw Port, to be executed by the Ministry of Oil within the federal budget.

Prime Minister Al-Sudani directed further discussions with the Italian consultant regarding the project's location within the port area.

(Source: Media Office of the Prime Minister)

By John Lee.

The Prime Minister of Iraq, Mr. Mohammed Shia Al-Sudani, has laid the foundation stone for a large tourism complex in Baghdad.

The project includes a large hotel, a residential complex, and various tourism facilities.

The Qatari Investment Holding Company [Estithmar Holding] is leading the project, which marks Qatar's first investment venture in Iraq, according to a statement from the Prime Minister.

During the inauguration ceremony, the Prime Minister expressed his gratitude to the Qatari delegation for their collaboration and the efficient processing of land allocation and investment licenses. He highlighted the following points in his speech:

• The project symbolizes a developmental tourism service in Baghdad, which remains a global focal point across multiple domains.
• Baghdad stands as a hub for commercial, cultural, intellectual, political, and economic activities.
• Diverse projects encompassing infrastructure, services, and residential sectors are being undertaken.
• The substantial cooperation between Iraq and Qatar began during the visit of Sheikh Tamim bin Hamad Al Thani, the Amir of Qatar, to Baghdad.
• The Qatari Holding Investment Company's project will be an architectural landmark that harmonizes with Baghdad's identity, drawing inspiration from history and heritage.
• The government views Arab investment as a gateway to economic integration and emphasizes economic partnerships with Arab and regional countries.
• Iraq offers numerous promising opportunities, with the government extending support and facilitation to serious companies.
• Investment support will extend to projects in Baghdad, provinces, and the Kurdistan region.
• Iraq's economy possesses robust potential and resources, guided by a clear vision.

The Prime Minister concluded by stating that these projects complement the strategic development plan, establishing integrated projects aligned with this vital initiative, which is one of the region's key economic corridors.

(Source: Media Office of the Prime Minister)

By John Lee.

Qatar's Estithmar Holding Q.P.S.C. has announced that its subsidiary, Elegancia Healthcare W.L.L., has established a branch in Iraq in line with the memorandum of understanding that was signed recently with the aim of managing and operating several hospitals that will start soon in Iraq.

Estithmar also announces that it's subsidiary, Elegancia Marine W.L.L., has established a  branch in Iraq.

According to a statement from Estithmar, "this implements Estithmar Holding's strategy to signify its commitment to the global expansion to increase shareholder value, within the framework of the close strategic relations between the two countries."

(Source: Estithmar Holding)

By John Lee.

The Ministry of Electricity has reportedly confirmed the formation of a joint committee with the Ministry of Oil to discuss importing gas from Qatar and Turkmenistan.

State-run Iraqi News Agency (INA) quoted theh Minister of Electricity, Ziyad Ali Fadhil, as saying that the committee will go with a delegation to Turkmenistan, and study the possibility of contracting to import gas, while another will go to Qatar to discuss the possibility of supplying Iraq with liquid gas through one of the Iraqi ports.

(Source: INA)

By John Lee.

Prime Minister Mohammed Shia Al-Sudani reviewed initial plans and overall outlines for a large tourist complex in central Baghdad on Sunday.

The project proposal was submitted by the Qatari Investment Holding Company [Estithmar Holding], specialized in real estate development and investment in tourist destinations. Pictures provided by the Media Office of the Prime Minister also show branding from Turkiye's Rixos Hotel group.

During the review, Prime Minister Al-Sudani emphasized the government's commitment to creating an ideal investment environment in Iraq to attract capital. The aim is to bolster the Iraqi economy's openness to the global market, which in turn is expected to create employment opportunities and stimulate development.

In a previous session held on August 1, the Cabinet approved the project's continuation. The complex will feature a cutting-edge hotel, international restaurants, ceremonial halls for local and international events, as well as vertical residential units.

These designs will draw inspiration from Mesopotamian history and culture, covering an area of 19 acres. The complex is set to open its doors before the year 2025.

(Source: Media Office of the Prime Minister)

By John Lee.

Qatar's Ambassador to Iraq, Khalid bin Hamad Al-Saliti, met with the former President of the Kurdistan Region of Iraq, Massoud Barzani, in Salahaddin on Wednesday.

The discussion revolved around the significance of the relations between Qatar, Iraq, and the Kurdistan Region.

During the meeting, the Qatari Ambassador expressed his country's intention to open a consulate in Erbil.

President Barzani welcomed this development, emphasizing the positive advancement of bilateral relations.

In addition to diplomatic matters, the meeting also touched upon the political situation in the region.

(Source: Barzani Headquarters)

By John Lee.

The Iraqi Ministry of Oil has signed four contracts, reportedly worth a total of $27 billion, with the French company TotalEnergies.

The contracts cover a range of projects, including the development of the Ratawi [sometimes called Artawi] oil field, the construction of a 1GW solar power plant, and the transportation of seawater for productive oil fields.

Also included is the Gas Growth Integrated Project (GGIP), in which TotalEnergies will hold a 45-percent stake, with 30 percent held by the state-run Basra Oil Company (BOC) and 25 percent by QatarEnergy, which will process 600 million cubic feet of gas per day.

The signing ceremony was held under the auspices of Deputy Prime Minister and Minister of Oil Hayan Abdul-Ghani. He said that the contracts "achieve the strategic vision of the oil sector and in harmony with the future plans in that."

The head of the French company Total, Patrick Pouyanné, expressed his happiness over the signing of the contracts. He said that his company is "keen to implement the terms of the contracts concluded within the specified controls and the time limit for that."

The official spokesman for the Ministry of Oil, Asim Jihad, pointed out the importance of these integrated contracts in developing the oil industry in Iraq. He stressed that the ministry is keen to implement contracts for strategic projects that achieve long-term gains for the country.

(Source: Ministry of Oil)

By Ahmed Tabaqchali, Chief Strategist of AFC Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Construction Activity and Stability

The market, as measured by the Rabee Securities RSISX USD Index was up 4.4% in June, and up 30.4% for the year.

The market's technical picture continues to be positive, with the macroeconomic fundamentals discussed here last year supporting the argument that the market's uptrend will likely remain in force.

However, its upward slope might moderate or go sideways as it consolidates its gains for the year before its next move. Supporting the consolidation thesis is the technical picture of the Rabee Securities RSISX IQD Index (the Iraqi dinar (IQD) version of the Rabee Securities RSISX USD Index) which reflects a multi-month consolidation pattern (second chart below).

The fundamental drivers for the market's next move would come from the government's implementation of the 2023 budget following its passage into law at the end of the month. The expansionary budget, as it comes into force, would result in meaningful liquidity injections into the economy as a consequence of the oversized role of the government's spending in the economy - essentially an efficient direct transmission mechanism of oil revenues into the real economy. Ultimately, these liquidity injections will feed into corporate profits, which in turn, will provide the impetus for the market's next move.

RSISX USD, and RSISX IQD Indices versus Average Daily Turnover

(Source: Iraq Stock Exchange, Rabee Securities, AFC Research, data as of June 30^th)

Construction Activity and Stability

As discussed here a few months ago in "Supermarkets and Stability", one of the most promising recent developments in the economy is the meaningful capital investment by businesses and individuals, brought about by the relative stability of the last five years following the end of the ISIS conflict. While, these years were punctured by several shocks, such as the countrywide demonstrations in late 2019, the assassination of Iran's top general in Baghdad followed by the emergence of COVID-19 and the crash in oil prices in 2020, the undecisive elections in 2021, followed by a year of a political impasse topped by political conflict and violence in the summer of 2022.

Nevertheless, these shocks pale in comparison to those of the prior decades of conflict that Iraq had experienced, and crucially, were short-lived and did not lead to self-reinforcing cycles of violence and conflict along the lines of the past. As such, this relative stability provided a more stable and predictable macroeconomic framework for businesses and individuals to operate in and to plan for capital investments on a scale not seen since before the last prior decades of conflict; that in turn, should be sustained by the population's pent-up demand for goods and services to catch up with the rest of the world.

These developments were first seen in the immediate aftermath of the ISIS conflict through the revival of long-forgotten social activities, expressed in consumer retail consumption (restaurants, coffee shops, and malls) and construction activity as reported in AFC Iraq's travel report in the summer of 2019 "Significant Social and Economic Transformation".

Over the five years since the end of the ISIS conflict, the construction activity that was then in the early stages of revival in Baghdad turned into a building boom, with construction cranes popping up everywhere and transforming the city. The last time Baghdad witnessed such a massive transformation was in the early days of the Iraq-Iran war, as the regime then embarked on a "Guns and Butter" policy to insulate the city's population from the ravages of the war, but eventually abandoned the policy as costs mounted and the war dragged on.

During these decades, the city's population grew from 3.1 million to 7.7 million while its infrastructure, until the last few years, for the most part, stayed the same. A continuation of the relative stability of the last five years and the multi-decade pent-up demand for infrastructure in Baghdad should sustain this infrastructure build, which can reshape the city in much the same way the building boom of 2003-09 reshaped Dubai and brought with it much prosperity.

This private sector led construction activity was supported by funding from the Central Bank of Iraq (CBI)'s IQD 14 tn (USD 10.7 bn) and IQD 4 tn (USD 3.1 bn) subsidised lending initiatives. Initially launched in 2015, the IQD 5 tn lending initiative was channelled through specialised state-owned banks and the housing fund, to support the real estate, industrial, and agricultural sectors, and the IQD 1 tn lending initiative was channelled through private sector-owned banks to support small and medium enterprises.

Both initiatives were augmented in mid-2020 with extra funding by the CBI, and lending terms were eased with interest rates as low as zero for the housing sector. Both of these measures accelerated the initial modest uptake with the bulk of the lending driven by demand for financing by the real estate sector, so that during 2021-22, about IQD 6.7 tn and IQD 0.5 tn were disbursed from the two initiatives for real estate financing (*).

This pent-up demand for real estate and the relative stability enjoyed by the country are acting as magnets, attracting regional capital to invest in the sector, such as Saudi Arabia's USD 1 bn investment in a new commercial, housing and shopping district in Baghdad. Announced in early June 2023, the project named "Baghdad Avenue" is a part of the country's accelerated reconciliation with its once close-knit neighbours in the countries of the Gulf Corporation Council (GCC), which was ruptured by the invasion of Kuwait in 1990 (**).

The real estate sector is not the only sector to benefit from the interest of regional capital as seen by the formation of the Saudi-Iraqi Investment Company, launched in late May 2023, with capital of USD 3 bn to invest in Iraq, funded by the Saudi Arabian wealth fund PIF. This was soon followed by plans for two significant regional investments in the country. The first was in  mid-June 2023 that Qatar plans to invest USD 5 bn over the next few years; while the second was in early July 2023 that  Saudi Arabia and the United Arab Emirates, each planning to allocate USD 3 bn to fund the creation of joint business councils to expand  investments in, and trade with, Iraq.

Supplementing the private sector-led construction activity in Baghdad is the beautification campaign of the city undertaken by the current government as part of its drive to gain public support and legitimacy - following its troubled formation in October 2022, a year after the undecisive October 2021 parliamentary elections that was marked by political conflict and strife. This beautification campaign involves "... improving roads, bridges and sidewalks, removing security checkpoints that worsened traffic, cleaning up facades of buildings damaged by war and revamping parks and promenades that hug the Tigris River that bisects the city" as reported by Reuters, in mid-May 2023 with photos showing the city reclaiming its former beauty.

The transformation of Baghdad has brought with it the inevitable loss of green spaces and traditional architecture that has marked its uniqueness throughout the centuries. Its famed date orchards and gardens that filled the city, as well as its beautiful traditional architecture such as the old homes with wood-latticed windows and traditional brick villas, are being replaced by malls, shopping districts, and apartment blocks - in an all too familiar pattern of destroying the old to build the new throughout the city's history (***). These unfortunate aspects of the city's development were reported recently by the New York Times and the Washington Post with vivid photographs of the traditional and new that show a city that is being transformed after decades of conflict.

Below are photographs taken by the author over the last few months of some of the parts of Baghdad that have been transformed and those that are being transformed, and complement the phots within the articles by Reuters, the New York Times, and the Washington Post mentioned earlier.

42^nd Steet, Baghdad

 

King Abdul Malik bin Marwan Street, Baghdad

 

Al Masbah Junction, Baghdad

 

Al Nedal Street, Baghdad

 

Al Sadoon Street, Baghdad

 

Palm Trees Street, Baghdad

 

Baghdad Tower Street, Baghdad

 

Yermuk Pool Street, Baghdad

 

Yermuk Pool Street, Baghdad

 

Entertainment Club Street, Baghdad

 

Baghdad Tower Street, Baghdad

 

Baghdad Tower Street, Baghdad

Notes and sources:

(*) Source: Central Bank of Iraq, IMF Iraq country report number 2023/075, and "Priority financing needs of Iraqi SMEs Report" published by GIZ May 2023.

(**) The reconciliation was reported here at the end of the market report for January, when the city of Basra hosted the 25^th edition of the bi-annual Arabian Gulf Cup football tournament, known as Khaleeji 25, for the first time since 1979. Then, over 50,000 GCC visitors streamed into Basra over the two weeks of the tournament in January 2023 which was the first such visit since the 70's.

(***) This pattern was discussed here in "Sandstorms, and a stroll down Al-Mutanabbi Street" in its description of the historic buildings in Al-Mutanabbi Street writing " ... A few years, later the building was expanded, and a tower was added using bricks reclaimed from the demolition of the eastern section of Baghdad's historic city wall."

Please click here to download Ahmed Tabaqchali's full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the Chief Strategist of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years' experience in US and MENA markets. He is a Visiting Fellow at the LSE Middle East Centre, Senior Fellow at the Institute of Regional and International Studies (IRIS), and a Senior Non-resident Fellow at the Atlantic Council. He is also a board member of Capital Investments, the investment banking arm of Capital Bank in Jordan.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

From Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Emir's second visit in two years highlights rising Qatari role in Iraq

Qatar's Emir Sheikh Tamim bin Hamad Al Thani has met with top officials in Baghdad in his second visit to Iraq in the past two years.

The Emir held discussions with Iraqi Prime Minister Muhammad Shia' Al-Sudani, culminating in a Qatari pledge to invest billions of dollars in Iraq "in the coming years."

The fledgling economic partnership follows recent Emirati and Saudi investments in Iraq to boost the country's economy following a period of political crisis.

The full article can be viewed here (registration required).